The long ‘journey’ of banks from Basel I to Basel IV: has the banking system become more sound and resilient than it used to be?
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Volume
20
Pagination
81 - 97
DOI
10.1007/s12027-019-00557-x
Journal
ERA Forum
Issue
ISSN
1612-3093
Metadata
Show full item recordAbstract
© 2019, Europäische Rechtsakademie (ERA). The amount of capital that banks have to hold has been raised over time due to the adoption of the increasingly demanding standards issued by the Basel Committee on Banking Supervision. Accordingly, in December 2017, the so-called Basel IV standards have been published with the final aim of further increasing the capital of banking institutions. Despite the criticisms, capital requirements are an effective tool to enhance the soundness of banks and in turn to help maintain financial stability. Nevertheless, the need still arises to make the legal framework increasingly less ‘one-size-fits-all-driven’, more conscious of the subjective differences among market participants and thereby more efficient.